Real Estate WEALTH Magazine - PART ONE

8/9/2019 Real Estate WEALTH Magazine - PART ONE

1/31

Wealth

Serving the Needs of Accredited Investors -INSIDE: Information to Grow and Maintain Your Wealth

ASpecialE

di

thePublishersofR

Vol. 1 No

Words of Wisdom from

Masters of Real Estate

16 19

Maverick Investor Group

Reveals the Next BIG Thing

35

Bruce Norris Prepares for Annual

I Survived Real Estate Charity


2/31


3/31

>

7Secrets from the Master!

Dave Lindahl shares his latest

tips for Investing Success

9 No Drama in Dayton

Triple Net Houses Helps

Investors Prot without Issues

11 California Living with

Tennessee Cash Flow

Mathew Owens, CPA, owner of

OCG Properties, explains why

he loves to invest out of state

14 Beware of the Investment

Vampires by RBS Homes

16 Dolf & Carter: A Master-

mind with Arizona Investors19 Enjoy a Tropical Paradise

with Phenomenal Returns

In search of their latest gem in

Nicaragua, Maverick Investor

Group traveled the world

22 Investor Nation Shares their

Blue-Chip Real Estate Strategy

25 Ginger Macias Three

FREE Ways to nd a Great

Wholesale Deal

27 Creative Real Es-tate Techniques with

Educator Bill Gatten

28 Matt Maloufs 10

Weeks to Massive,

Passive Cash Flow

30 A Visit with Sensei

at his 12 Rounds Club

35 Bruce Norris discusses the

I Survived Real Estate 2010

Charity Walk and Gala

37 Join the Ultimate Bus Tour

with MemphisInvest.com

39 Creative Financing Options

with MMG Capital, LLC

40 Philbin Capital Discovers

Deals in the Golden State

42 The Key to Success by Club

Founder Sam Sadat

45 Buy Bigger and Better Deals

by Kathy Fettke

46 Alternative Economics

Club Debuts in California

51 Stop the Gambling!

Mike Woo, a Rich Dad, Poor

Dad protg, advises clients

52 Is Your Mortgage Underwa-

ter? Perhaps a Short Pay Re-

nance is the Answer

55 Pay Off Your Rental House

in Five Years with the Short

Term Retirement Program

57 Whos On Your Team?

Insights by 360 Investments

photo: Sam Green


4/31

Bruce Norris

PresidentThe Norris Group

Tommy Williams

2008 PresidentNational Auctioneers

Association

Sean OToole

President

Foreclosure Radar

Joseph Magdziarz

Vice President

Appraisal Institute

The Norris Groups award-winning event returns September 17, 2010 to the Nixon Library in Yorba

Linda, California. Were assembling an incredible line up of accomplished industry specialists to

discuss the state of the REO market, on-going industry regulations, and the opportunities emerging

for real estate professionals.

New guidelines aect every sector of our industry. In a climate ripe for both miscalculation andprotable advances, how are our colleagues and partners navigating an industry in continued

transition? Our Whos Who Round Table Includes:

Last year, I Survived Real Estate 2009 focused on the dramatic shifts in regulation facing our industry. This year, our

panel separates fact from ction as we delve into the health and sustainability of the current real estate market and the

opportunities that lie ahead for hungry real estate professionals.

To nd out how you can participate as an individual or potential sponsor, see the back of this yer or visit ISurvived2010.

com for more information. Seating to this formal dinner event is limited, so go to the website or call our oce today.

Thanks you to all our Platinum and Gold Sponsors and friends for making this unique event a possibility.

A Powerhouse Lineup of Top Industry Experts Presents

the Insiders Edge on The State of REO 2010

www.ISurvived2010.com or 951-780-5856

Platinum Partners

Christopher Thornberg

PrincipalBeacon Economics

Sarah Letts

Director, Credit Loss Mgmt

Fannie Mae

Daniel Phelan

Mortgage Bankers

Association

Peter Wayman

Sr. REO Director

Freddie MacMVTPRODUCTIONS


5/31

We cant do this without your help! Businesses or individuals who are interested in

participating have two options:

1. SPONSOR the I Survived Real Estate Komen Breast Cancer WalkingTeam in exchange for a seat (or table) at the event

2. JOIN the I Survived Real Estate Komen Walking Team and raise

money in your network for the walk in Newport Beach September

26th. Every $200 gets you one seat to the event (while seats remain).

All donations are made directly to our Susan G. Komen Breast Cancer Walk Team so100% of the proceeds go to the Orange County Aliate of Susan G. Komen for the

Cure.

This formal dinner event includes visitation to the Nixon Museum, appetizers, 3 coursemeal, and the live event. Additional benets are listed below for those that become

platinum and gold sponsors (Please note all funds must be in place July 10th for gold

and platinum sponsors to take advantage of initial radio spots).

Single Gold Platinum

Cost $200 $2,000 $5,000+Tables (Seats) Received (1) Seat 1 (10) 2 (20)

Advertising

Logo on Event Website featured

SEO-Optimized Prole

Logo on Flyers Name only

Digital Signage at Event featured

Preferred Seating featured

Event Program Ad 1/3 page 1/2 page

Radio Show Mention (Intro - 15 total*)

Radio Show Mention (Outtro - 15 total*)

Event Video (Intro - Single Page)

Event Video (Outtro)

Press Release Mention

Event Bag Marketing Oppotunity

Call Diana Barlet at 951-780-5856 or visit

ISurvived2010.com for more information and preferred seating.

Note: All donations must be made through the I Survived Real Estate 2010 walk team to be eligible

for advertising. July 10th is the deadline for all money to be in place to ensure radio spots include theselected sponsor. There may be more than 15 radio shows that are aired for the run of event.

Winner of seven communication, outreach, and fundraising award

SPONSORSHIPOPPORTUNITIES

Gold SponsorsBenton Group

Delmae Properties

Elite AuctionsEntrust

Inland Empire Investors ForumKeystone CPA

Las Brisas Escrow

Leivas Financial Services

North San Diego Real Estate

Investors Association (NSDREI)

Personal Real Estate Investor

MagazineMike Cantu

Realty 411 MagazineRick & LeeAnne Rossiter

Starz Photography

Tony Alvarez theREOmentor.com

Westin South Coast Plaza


6/31

Dont You have

better thingsto do than dealwith tenantsand toilets?

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Is this opportunity right for you?

Visit our ofce and see why so many

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Make an appointment to secure your

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www.herrerasindell.com

Toll Free (877) 949-2772

As featured inRealty411 Magazine

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Disclaimer: This is not a public offering nor is it a REIT or hedge fund. This is not an offer or invitation to sell or a solicitation of any offer to purchase securities in the United States or any other jurisdiction.

Any securities may only be offered or sold, directly or indirectly, in the state or states in which they have been registered or may be offered under an appropriate exemption.


7/31

What You Need to Succeed

First and foremost, to succeed as a real

estate investor you must be motivated. This

business isnt for the undecided. You have

to want it bad enough to take action. Be-

cause where theres a strong will, theres

wealth.

I was 100% determined to own real es-

tate. I didnt let the fact that I had a less

than $800 in the bank stop me from buying

my rst property, a three-unit building in

my hometown.

Sure, I was nervous doing that rst deal

I had no direct experience. No track record

No personal wealth to use for collateral

But I didnt let any of that stop me.

This is why I tell beginners everywhere

that they can own real estate right now

I dont care if youre broke like I was. If

youre motivated to succeed, real estate

and all the personal wealth it can generate can be yours once you know how to nd

properties and structure the deal.

How I Found My First Building

I bought books and tapes on real estate

even though I didnt nd much on apart-

ments. I went to local investment clubs

networked with experienced investors, and

started bird-dogging for them (nding

FOUNDER & EDITOR

Linda Pliagas

[email protected]

EDITORIAL STAFF

Lori Peebles

Matt Malouf

Carla Fischer

Ginger Macias

COPY EDITOR

Lorie L. West

PHOTOGRAPHERS

Sam Green

John DeCindis

COLUMNISTS

Dave Lindahl

Charles SalisburyADVERTISING

Kelly Global Marketing

[email protected]

310.439.1145

EVENTS & EXPOS

Lawrence Ruano

ruanoinvestments@gmail

805.791.5457

PRODUCTION

Lori and Mike Hampton

Emma Krull - The Dab Hand

CALIFORNIA DISTRIBUTION

Professional Distribution Solutions

1.877.418.6500

NATIONAL DISTRIBUTIONKJ Banks: 805.377.6328

PUBLISHED BY

Manifest Media Partners

Nikolaos K. Pliagas - Chairman

Our Mission is to Educate & Inspire

INFO/FAX: 310.499.9545

Realty411Guide.com | reWEALTHmag.com

Main email: [email protected]

Realty411

Realty411and Real Estate Wealthmagazines are published in LosAngeles by Manifest Media Partners (mailing address: 4221 Neo-sho Ave., Los Angeles, CA 90066). Publishers are not responsiblefor unsolicited manuscripts, photographs and/or other materials.Copyright 2010. All Rights Reserved. Reproduction without per-mission is strictly prohibited. The opinions expressed by writersare not endorsed by the publishers and/or editorial staff. Beforeinvesting in real estate, seek the advisement of a trusted nancial

adviser, attorney or tax consultant. Please invest responsibly.PRINTED IN THE USA. GOD BLESS AMERICA

Connect to our network @

As a successful real estate inves-

tor and top-selling author, Im

on the road a lot presenting

workshops across the county.

I often start with a bit of personal history

because when youre a multimillionaire

like I am, people assume you were either born rich or had a wealthy mentor show

you the inside track to making money.

Thats not my story. Not by a long shot.

Fifteen years ago, I was running my own

small landscaping business in New Eng-

land. I was a guy with a pickup truck and

lawn mower. If you havent experienced a

New England winter, let me simply say it

means I was literally frozen out of work for

a good part of the year.

I spent winters doing odd jobs to scrape

by. A friend asked if I wanted to repair a

property that needed some TLC so it could

be resold fast.

The owner was looking for a quick x

and ip, and thus I was indoctrinated in the

business of ipping properties before it be-

came a national pastime and the subject of

cable TV shows. But what attracted me to

real estate was not the quick turn. It was the

steady cash ow.

The idea of checks from renters lling

my mailbox month after month, regardless

of the weather, really appealed to me.

I wanted other people to pay my mort-

gages, creating huge equity in my build-

ings. I wanted to sit back and watch my

buildings appreciate, making me wealthier

and wealthier.I wanted to live off the positive cash ow

that I received each month, so I wouldnt

have to go to a job every day. No more dai-

ly grind. No more living paycheck to pay-

check. Best of all, I liked that millionaire

was the likely outcome if I did it right.

Back then there was nobody teaching

how to buy rental properties. The gurus fo-

cused on single family houses, just as they

do today. So I had a big learning curve.

by Dave Lindahl

Continued on pg. 60

WealthReal Estate

published for Investors by Investors

&

Realty411Guide.com PAGE 7 2010 reWEALTHmag.com

Who Else Wants Up to

$5,000$10,000 or MoreExtra Monthly Cash Flow?


8/31


9/31

there. When we rehab a property we pretty

much do everything so we know its going

to be a maintenance-free property. When

we nish, its almost like a new house.

The companys record is impressive. In

the year 2009, we collected 97.4 percent ofour scheduled rent, Julian proudly states

It even amazes me!

In Dayton, market rents range from $595

to $950. The company rents with a one

year lease agreement. A typical scenario

is this: A tenant occupies a three bedroomone bath home, 1,100 square feet, with a

one car garage, for $700 a month. Many

homes are brick with full basements, some

are ranch houses built in the late 50s.

Dayton is home to the largest single

site employer in the state of Ohio: Wright

Patterson Air Force Base with 26,000 em-

ployees. The city also has two universities:

Wright State University with an enroll-

ment of about 18,000, including a medical

school. Next is the University of Dayton,

which enrolls over 10,000 students and

also offers a law school program.As far as the nancials, a Triple Net in-

vestor can realize up to 17% return on each

house.

If the investor pays cash then they

will receive 9.1%. Julian explains fur-

ther: For example, if they have a $60,000

house the investor will be receiving $5,460

a year, which is 9.1% of the purchase price

Do you have reservations about becoming a landlord?

Triple Net Houses created a program to help investors prot

from rental properties without ever having to deal with tenants!

Invest WIthout Drama

If an investor buys a Triple Net House, they know exactly what their

cash ow is going to be for the next 10 years. They never have to deal

with tenants and never have to deal with or pay for maintenance.

In 1903 The Wright

Brothers made history

in Dayton, Ohio, with

their rst power airplane

ight.

One hundred four

years later, Peter Julian, CEO of

Triple Net Houses, reects on

their short three-year revolution-ary history that began in 2007 as

a premiere provider of real estate manage-

ment. Weve reinvented the way people

invest in residential rental real estate, Ju-

lian says proudly. He then adds: Its kinda

overcast. Were going to get some rain lateron, which doesnt mean a thing for our in-

vestors who are from all over the country.

The weather rarely has anything to do with

our business, unlike the Wright Brothers.

Julian shifts to business quickly explain-

ing how he created a NNN (triple net) in-

vesting model, which is traditionally only

found in commercial real estate transac-

tions.

Ive been a real estate broker for a little

over 30 years. Ive worked with investors

my entire career. When I talk to them, most

like all the good things about real estate,like the cash ow, the tax write-offs, build-

ing-up equity, and potential appreciation.

But when potential investors get to talking

about managing, theyve all heard the hor-

ror stories about tenants, maintenance and

all those kinds of things.

So Julian and his team came up with

a unique solution. Its basic and simple,

even though it tackles a complicated con-

cept. The Triple Net Houses program

(www.triplenethouses.

com) takes all the un-

knowns off the table.

By purchasing a Triple

Net rental, investors will

know exactly what their

cash ow is going to be

for the next ten years.

Julian explains: Whenwe lease the house its a

triple net lease, which means we pay taxes,

insurance and maintenance. Basically we

pay all the operating expenses, so theres

nothing our clients have to pay. We man-

age the property so theres no management.Investors will never have to deal with a ten-

ant and never have to deal with or pay for

maintenance, Julian explains.

The company offers a 10-year NNN

(triple net) lease. If investors want to ter-

minate early, all they have to do is provide

a 60-day written notice. There is no penalty

and the investor still owns the property.

Its a turn-key investment. It pays a

high yield and were able to buy houses at

low cost and rehab them economically. We

then pass that deal on to an investor, as a

totally turn-key investment. Their total in-volvement after the investment is to collect

a payment from us each month, which is

electronically deposited into their checking

account. Its a perfect storm.

When asked how Triple Net Houses can

provide guaranteed returns for investors,

regardless of what is going on with their

property, Julian replies: Were very care-

ful in selecting properties in neighborhoods

where we know the rents are going to be

by Carla Fischer

Continued on pg. 47

Peter Julian



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CaliforniaInvestors

Specializing inthe Memphis

Market!


11/31

California LifeTennessee Rentals

Last year, while working as a pan-

elist at a local real estate invest-

ment club in Los Angeles, I had

the pleasure of meeting Mathew

Owens, a certied public accountant and

owner of OCG Properties. I was so im-

pressed by his experience and work ethic

that I invited him to partner with me on

syndicating real estate projects.

Having worked closely with him for al-

most six months now, I can say that hes the

real deal and youll be in for a treat if you

get the chance to work with him. Mathewhas many strengths that make him a great

partner: integrity, organizational skills,

and real estate and investment prociency.

Plus, hes very likable.

I have met a lot of people in this business,

and I expect great things from him in the

coming years.

I recently sat down with him to ask about

his real estate investing strategies and the

current projects hes working on out in Ten-

nessee. Mathew has purchased, renovated,

and sold or held more than 100 investment

properties in the last three years alone.

Below is a partial transcript of the inter-

view I had with him.

Ginger: Mathew, in your own words,

what exactly does OCG Properties do?

Mathew: In a nutshell, we help people in-

vest in real estate. At OCG, we sit down and

go over our clients nancial situation and

resources to help them nd the best ways

to invest and meet their individual goals.

With good in-house management in place,

you can hold for long-term growth and re-ally get a great return on your money. On

top of that, the price points are low enough

that you can buy with cash and not even

have to deal with nancing. Talk about low

risk!

We help our clients achieve great returns

on their money while doing all of the due

diligence on every investment. We bring a

ton of real estate experience to the table and

help our investors every step of the way.

Ginger: What did you do before you

became a full-time real estate investor?

What is your background?

Mathew: Lets see, I grew up in the tiny

town of Los Angeles and graduated from

the University of California, Santa Bar-

bara, with a degree in economics and an

emphasis in accounting. Afterwards, I was

able to achieve one of the accomplishments

I am most proud of, passing all four parts

of the CPA exam in one sitting, a feat only

10% of candidates have been able to do.

After passing the exam, I worked as aCPA, auditor and business adviser, help-

ing my corporate and individual clients

increase their bottom line, helping them

nd fraud risk factors inside their business

systems and auditing their accounting re-

cords.

I guess that is why I am so good at do -

ing due diligence on real estate transactions

now. The accounting and due diligence

skills are a perfect match for a real estate

investor, I just had to adjust my personality

to be more outgoing and personable, which

most CPAs are not known to be. Being in

the real estate industry as a full-time inves-

tor, I am nding it is rare to nd a CPA who

understands the tax and legal implications

of investing and the real estate investment

side in detail.

Ginger: So tell us, how did you get your

start in real estate?

Mathew: I started investing about ve

years before I decided to take some real

estate education courses and quit my cor-

porate job cold turkey. I found that the skillsets I gained from working at CPA rms

were hugely valuable, and I still hold the

partners of those rms with the upmost

respect for what they taught me, the eth-

ics they instilled in me and the guidance

they gave me. However, the skills that I

have developed running my own company

are unparalleled to anything I would have

ever expected. While working for myself,

I started ipping and holding properties >

by Ginger Macias | photography by Sam Green



12/31

to go out and develop a team in every mar-

ket, which is exactly what we did out in

Memphis. We have in-house management

and a team on the ground there that helps

us get all of the

information we

need to be suc-

cessful.

Ginger: What

team members

should one have

when investing

out of state?

Mathew: There

are a number of

team members

you need in order

to be a success-

ful real estate

investor. At the

top of the listfor any buy-and-

hold investor is a

great, and I mean

GREAT, prop -

er ty manager

Property man-

agement is the number one reason an in-

vestment property will fail to produce posi-

tive cash ow, assuming you did your

numbers correctly and did not buy in a

ghetto. In addition, an investor needs lend-

ers, REALTORS, inspectors, appraisers,

attorneys, CPAs, IT consultants, marketing

agents and the whole nine yards to really

develop a good system. Each team member

is crucial to your success, and that is why

investing in real estate can be so difcult

at times.

Your team can make or break you, and

you need to have reliable team members

that communicate well with you to be suc-

cessful.

Ginger: What separates your company,

OCG Properties, from the rest?Mathew: At OCG we have in-house prop-

erty management, which is the key to our

and your investment success. We also take

an ethical and conservative approach to in-

vesting and do all of the right due diligence

on every investment.

We really care for our clients and care

about their goals and what their interests

are. We have a guaranteed tenant and reno-

vation on every property, and put the proper

that the current reported unemployment

rate is 12.8%, there is a $19.9 billion dollar

gap in the California budget, the California

mortgage delinquency is up almost 100%

year on year, 90% of

the Alt-A and Option

ARM loans coming

due are underwater in

California, 1/3 of Op-tion ARM loans are

delinquent already, the

California tax rate rose

from 9.3% in 2008 to

9.55% in 2009, and it

will rise again to cover

the gap in the budget.

On top of all that,

people who are under-

water in their homes

and not in nancial

hardship are starting

to walk away becauseit does not make nan-

cial sense to hold them

and hope they go up

$200,000!

Ginger: Im an out-

of-state investor too but other investors

may be skeptical about owning property

so far away.

Mathew: They are really missing out!

Ginger, we both know that with technolog-

ical advances you can invest anywhere in

the world now, and its as if youre invest-

ing in your own backyard.

The reality is, everyone has the resources

in Memphis. I got through my initial learn-

ing curve and kept striving for more deals

with a magnicent obsession for real estate

that only few can really understand. It was

tough, but after getting through the strug-

gles, you nd yourself breaking through

and nally achieving success. Working that

much taught me multiple things. But one

thing stuck more than anything else: Pas-sive income is the goal!

Ginger: You live in Southern California

and invest in Memphis, Tennessee. Why

do you invest so far away from where

you live?

Mathew: That is right, I live in sunny

Redondo Beach and invest in Memphis.

Most of the investors I meet ask me this

exact question, and the simple answer is:

I invest with logic and statistics, not based

on what my emotions are telling me.

Look at the economics in the Memphismarket. It has one of the highest price-to-

rent ratios in the nation! It did not take a

huge dip like a lot of markets, it had an av-

erage annual appreciation of 4% per year

over the past 20 years. Its a very stable

market. The population is also expected to

increase and you can pick up property that

not only cash ows but gives you apprecia-

tion potential in the next 10 years, which is

not something I can say about California.

California is a huge risk right now for buy-

and-hold investments.

If you take a look at some of the econom-

ic indicators in the California real estate

market, some of the things you will nd are

Mathew Owens, his brother and little sister.

A sample OCG Property.



13/31

structuring and risk miti-

gation procedures in place

on every investment. We

also set up proper com-

munication procedures

for our management com-

pany to keep our investors

frequently updated on the

progress of their invest-ment.

Ginger: What due dili-

gence is done on your

investments?

Mathew: Wow, where

do I begin? I will give

you the quick version. To

start off, we do a complete

neighborhood analysis on every property

along with a market value analysis, which

includes pulling comparable sales and get-

ting an appraisal done before we close es-

crow. We also do a rental analysis, cash

ow analysis, prot analysis, renovation

analysis and every kind of analysis a CPA

can think of to protect ourselves and our

investors.

In addition, we get an inspection by a

qualied inspector and compare it to the

renovation bid. Each renovation bid comes

with an item-by-item, room-by-room

breakdown of the renovation costs, includ-

ing materials and labor. This is extremely

important so you know what your costs are

going to be on future renovations. When

leasing a property, it is important to get a

qualied tenant. If you do not, you will be

sorry later when you have to evict them because they cannot afford the rent. We

qualify them similar to a home loan pro-

cess. We look at their debt-to-income ratio

and credit. We do a background check and

really get a good assessment of their per-

sonality, which can tell you a lot.

Ginger: What tips can you give to people

who want to get started investing in real

estate?

Mathew: Do not give up, no matter what.

Any business, any new venture or opportu-

nity that you want to achieve, is 90% men-

tal and 10% skill. If you never give up, you

can never lose. Its best said in the book

Think and Grow Rich by Napoleon Hill:

Before success comes in anyones life,

one is sure to meet with much temporarydefeat, and, perhaps, some failure. When

defeat overtakes someone, the easiest and

most logical thing to do is to QUIT. That is

exactly what the majority of men do.

If you never quit, you will succeed no

matter what adversity you face.

Ginger: What is the rst step someone

needs to take to invest with you?

Mathew: They need to call us and sched-

ule a consultation. We look at each inves-

tors resources, nancial situation and in-

vestment goals to make sure we help theminvest the right way and surpass their indi-

vidual investment goals. Once an investor

schedules a consultation with us, we move

them from sitting on the sidelines to devel-

oping a passive income stream to retire on

as fast and safely as possible.

Ginger: Do you have anything else you

would like to share with our readers?

Mathew: Yes, thank you. I would just like

to add that some people will make up ev-

ery excuse in the book for why they do not

or cannot do something. I am here to tell

you that you can do ANYTHING if you

focus and take ACTION steps towards its

achievement.

Do not let your emotions tell you it can-

not be done, even if you were not initially

successful. Even if it is difcult to see how

you are going to accomplish it, dont give

up. There is always a way, but it comes

down to taking action. Most people give

up at the mere thought of difculty, and

your success in real estate, and in life, are

going to be based on your ability to focus

and take action.

Also, a successful investor has to be

completely dedicated. They must ignore all

of the people who have an opinion but areless- educated about the subject.

Ginger: Thanks, Mathew. I wish you

continued success in your investments.

Mathew: Youre welcome, Ginger.

For more information, please visit:

www.ocgproperties.com or email:

[email protected] | OCG Properties

can also be reached at: (424) 757-4680

With technological advances you caninvest anywhere in the world now, and its as

if youre investing in your own backyard.

Photograph of Mathew Owens by Sam Green



14/31

Wealth

ServingtheNeeds ofAccreditedInvestors- INSIDE:InformationtoGrowand MaintainYourWealth

ASpecial

Edition

from

thePublish

ersof

Realty411

V ol . 1 No. 1 2 01 0

WordsofWisdomfromMastersofRealEstate16 19 Maverick InvestorGroupRevealstheNext BIGThing35 BruceNorrisPreparesforAnnualISurvived RealEstateCharity

The ten years ahead of us will beextremely difcult for investors.

Yield and growth will be scarce,

but much worse will be the four

vampires waiting to suck the life out of

almost every investment you consider. In

this article, we will meet each vampire in-

dividually, understand how they drain your

investments dry and learn about some in-

vesting garlic that can keep them away.

Ination: the First Investment Vampire.

If you remember President Gerald Ford

then you may remember his Whip Ina-tion Now campaign, created to ght ina-

tion climbing over 10%. Eventually

ination reached over 14%

annually in 1980, usher-

ing in years of staga-

tionhigh ination

combined with high

unemployment. In

only ve years the

value of invest-

ments dropped by

50% and the dollar

lost almost 75% of

its purchasing power

during that decade.

This year, with unem-

ployment and underem-

ployment already approaching

25%, the nation is poised to see a replay of

those difcult years.

To estimate the curve of ination in this

new decade, we need a basic understand-

ing of the causes of ination. Noble Prize

winning economist Milton Friedman said it

best, Ination is always and everywherea monetary phenomenon. In other words,

when the Federal Reserve prints more

money than the economy can absorb, the

economy catches a bad case of ination in

the next 12-24 months.

The money supply exploded in 2009. It

doubled in the space of a few months and

then grew another 50% in the next year.

Since the economy has not grown by

150% in the past two years, all this money

is waiting in bank vaults to drive signi-

cant ination soon. Experts argue that de-ation is the bigger risk. While that may

be true, it does not make ination any less

destructive when it starts nibbling at your

investments.

Garlic to Protect Your investments from

the Ination Vampire

To protect against the corrosive power of

ination, you need investing vehicles with

three specic features:

Asset value that tracks ination.

Asset income that tracks ination.

Asset that has considerable leverage.Its no surprise that investment real es-

tate has all three of these critical features.

In general real estate values track

ination. That is, their value

remains constant or appre-

ciates even as the value

of each dollar declines.

Likewise, the income

rentfrom investment

property tends to track

ination. And nally,

you can leverage your

investment asset.

But Not Just Any Real

Estate!

In truth, most real estate does

not deliver these three critical fea-

tures. The past few years, have seen crush-

ing drops in the price of condos in Miami

almost any property in Detroit, suburban

tract homes in Phoenix, plus ofce tow-

ers and shopping malls across the country.

Buying investment property takes effort,

considerable research and a team of ex-perts working to assist you. With the right

guidance and team in place, an investor

will never have to worry about those evil

investment vampires.

Richard Barrett is CEO of RBS Home

(www.RBSHomes.com). With offi ces

based in California and Texas, RBS Homes

provide investment properties with thes

three critical factors in place.

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Dolf de Roos Carter Froelich

Carter: Hello, Dolf. Tell us about what

youve been doing lately and give inves-

tors your perspective on the market.

Dolf: Well, Carter, although the media re-

peatedly states this is the worst real estate

market we have seen in decades, it is only

the worst market if you are in the unfortu-

nate position of being forced to sell. If you

are in the fortunate position of being able

to buy, then by denition, this is the best

market we have seen in decades.With that said, there are still many who

have trepidation about entering our current

real estate market. This has forced me to go

overseas. There are many countries right

now experiencing the peak we saw a few

years ago so they see the relative merits of

bringing their money to the United States

and investing here.

Carter: Why did you become interested

in The Property Ledger?

Dolf: I like being on the cutting edge of

what is available. I have always done well

with new technology. When fax machines

came out, it saved us thousands of dollars a

year in courier fees.

Now, we dont fax; scanned attachments

are better quality, in full color and dont

require an outdated phone system to get

through to a recipient.

When I come across people in the real es-

tate industry who do not use email, and in-sist on using faxes exclusively, I think they

must miss out on deals because of their

aversion to new technology. I do not want

to fall into that trap. The Property Ledger

is cutting edge, extraordinarily useful and

easy to use. Why would you not use it?

Carter: What benets are provided by

The Property Ledger, which other prod-

ucts do not provide?

Dolf: With the information stored in the

cloud, you can access your portfolios de-

tails from any computer connected to the

Web. Before long, most services will have

that feature, but by then The Property Led-

ger will have innovated yet another area

Surng is so much easier one foot ahead of

the wave than one foot behind.Furthermore, having all the details of

a property, including title documents,

HUD1s, leases, management agreements

and the like, stored in one central reposi-

tory is simply a great way to run your prop-

erty investment business. Once you have

experienced it, it is difcult to revert back

It would be like going back to using slide-

rules, or for those readers not old enough to

remember what they are, the curly-paged

and faded fax machine if they even re-

member that!

Carter: Since you travel often, are the

features of Electronic Library useful?

Dolf: Absolutely. In fact, more and more

companies are trending towards cloud

computing. Clearly, it is convenient to

be able to access all the relevant data on

a property from anywhere and not have

to be concerned with taking up space on

your own computer, keeping data in sync,

having the data concerned fall into strange

hands in the event of a computer loss, in-

Dolf&Carter

Tips from AZ

give readers the latest

... with the information stored in the cloud,you can access your portfolios details from

any computer connected to the Web.

The world of real estate investing is a small one.

Investors rub elbows at similar events, read in-

dustry publications and generally run in the same

circles. Carter Froelich, an author, investor and

CEO of The Property Ledger, recalls the time he met best-

selling author and renowned educator Dolf de Roos, Ph.D.

The two savvy Phoenix-based investors became friends

after an introduction by Andrew Waite, publisher of the Ari-zona-based, Personal Real Estate Investormagazine.

At the time, Froelich was busy developing The Property

Ledger, his online software designed to analyze property

holdings, store documents and forecast future returns. Once

ready to launch, he asked de Roos to test out his creation.

That was three years ago, and de Roos still uses the software

to track his portfolio.

Recently, Froelich welcomed de Roos home from his ex-

tended visit to Australia. The famed author of eight books,

including the New York Times Best Seller Real Estate

Riches, was visiting Down Under to raise private money

for property investments in Arizona. It proved to be a won-

derful opportunity for one master investor to interview

another. Froelich enthusiastically took on our assignment

and provided an outstanding interview.

This indeed is a rare treat; prepare to learn from two of

Arizonas top real estate investing giants. The Editor

Interview by Carter Froelich, CEO of The Property Ledger



17/31

stalling upgrades, etc. It is all done for the

end user.

Carter: Why is it important for investors

to monitor the nancial performance of

their real estate portfolio?

Dolf: Interestingly, it is important for inves-

tors in stocks and commodities to maintain

a vigilant eye on their volatile investments

so that they can jump ship if the ship starts

to sink. With real estate being a much more

stable investment, much of the interest in

monitoring your portfolio is just that: inter-

est. However, if you want to know when

you can invest in yet another property,

based on cash-reserve build-up, equity po-

sition, available collateral, etc.), then you

want to have the up-to-date information

available instantly. The Property Ledger

provides just that when you need it.

Carter: How often should an investortrack the nancial performance of their

real estate portfolio?

Dolf: As often as they feel comfortable.

One of the advantages of real estate invest-

ing that I often tout is that unlike the stock

market, where you have to monitor your

investments regularly, with real estate, you

can buy a property and put the title in a bot-

tom drawer, take a six-month cruise, and

not worry if you should sell the property

again. However, it is comforting to be able

to put your nger on the pulse of how your

investments are performing.

Carter: What is your favorite nancial

calculation when analyzing your proper-

ties? And why? Here are the choices:

Gross Rent Multiplier

Cash-on-Cash Return on Investment

After Tax Cash-on-Cash Return

Internal Rate of Return

Return on Equity

Dolf: I like to analyze based on cash-on-

cash return. This calculation shows you

how the cash you are putting up is perform-

ing. It is the prime indicator of how you

can truly leverage your money. What other

investment allows you to get a $100,000asset for only $10,000 or $20,000 in cash?

For most investors, you cant buy

$100,000 worth of stock or gold or oil

without coming up with the entire pur-

chase price in full. When you put up all the

money to buy an investment, the return is

simply the income divided by the invest-

ment. With real estate, since you only need

to come up with a small portion of the pur-

chase price in cash, the cash-on-cash return

becomes very important and, dare I say

it, interesting. It is an advantage inherent

in real estate investing that is often over-

looked by nancial advisors.

Carter: What type of investment do

you favor right now and why?

Dolf: When it comes to residential property

I prefer the single-family home. However,

for the last two decades, I have personally

focused on commercial real estate. That

doesnt mean I havent invested in other

sectors but the benets of commercial real

estate for the property owner are incred-

ible. Here are just a few of the benets:

1. The leases tend to be much longer

anything from three to twenty years. They

are generally secured by the business, withthe owners offering a personal guarantee.

2. Commercial tenants tend to maintain the

property better as the look and condition of

the property is important to their business.

Continued on next page


18/31

Dolf & Carter, pg. 17

Tenants often improve and up-

grade the space with their own

money.

3. With residential property, the

landlord tends to pay the outgo-

ings such as property taxes, in-

surance and maintenance. With

commercial real estate, the ten-ants who are leasing the prop-

erty, pay for those expenses.

Carter: Were both located in

Arizona; lets discuss the local

market. Where is it heading?

Dolf: Im optimistic. There was

an article in the paper just three

days ago stating Taylor Morri-

son Homes will begin construc-

tion in July of a master-planned

community in Gilbert. There

will be 17 phases developedover the next 12 years accord-

ing to the report submitted to

the Gilbert Planning Commis-

sion. This is indicative of the

long term. In the short term,

things look pretty grim, again,

if you are forced to sell. There

is word on the street that there

will not be a u-turn for years.

Things go in cycles. Whenyou get old enough to have

experienced a few cycles, you

learn to embrace them rather

than fear them. There will be a

turnaround. If you can buy real

estate that cash ows now and

have a great chance that long

term the capital value will go

up immensely, why would you

not acquire some real estate?

Learn more online about

The Property Ledger, visit:

www.thepropertyledger.comTo reach Dr. Dolf de Roos, visit:

www.dolfderoos.com

FREE e-Book Offer, For a Limited Time!DownloadThe Real Estate Wake Up CallToday

http://thepropertyledger.com/buy/90-the-real-estate-wake-up-call-e-book-free


19/31

Maverick InvestorGroupScours the Globefor theBest Investment Properties

Next Destination: The Hidden Tropical Paradise of...Nicaragua

Interview by Linda Pliagas

With a name like Maverick, one

immediately expects the unex-

pected. Real estate with a hip

and a bit of a rebellious twist.

Maverick Investor Group delivers all that

and more. It is a real estate brokerage that

caters to a community of sophisticated real

estate investors and agents, all of whom arecommitted to using real estate as a vehicle

for designing their lifestyles. The broker-

age is licensed with its primary ofce in

Las Vegas, but the Maverick principals all

live in different states, work from laptops

on rooftop pool decks, and travel the globe

in search of premium buying opportunities

for their exclusive clientele.

Maverick negotiates directly with devel-

opers and owners for prices and terms that

are not available to the public. The buying

power of the Maverick community enables

developers to move more properties in lesstime and save money on advertising, mar-

keting and other normal overhead. This al-

lows them to offer special prices and terms

to buyers in the Maverick community that

they could not offer to the general public.

Indeed, the traditional brick-and-mor-

tar neighborhood brokerage dedicated to

farming a ve-mile radius, driving buyers

around and sitting at open houses seems

like an archaic business model next to

Maverick.

Even more avant-garde than their busi-

ness model is their corporate vision: To

radically improve peoples lives through

real estate.

And their radical approach to real estate

is working. Even during 2009, in a single

90-day period, the company was able to

close as many as 34 transactions and pay

out nearly a quarter of a million dollars in

buyer referral fees to real estate brokers in

the Maverick Referral Network.

Mavericks business model, including

the international component, is just a con-

tinuation of the global lifestyle enjoyed by

its principals. The company was founded

by Mark Solak, Valerie Schrock and Mat-

thew Bowles real estate investors >

Mark Solak Valerie Schrock Matt Bowles



20/31

and licensed real estate professionals with

formal, advanced degrees. Prior to joining

forces, they led cosmopolitan lives, trav-

eled the world and lived in foreign coun-

tries for extended periods of time.

Recently, I caught up with the Maverick

power trio to discuss their latest turn-key

buying opportunitythe Seaside Mariana

Spa & Golf Resort on the Pacic coast ofNicaragua.

Q: How did the three of you become busi-

ness partners? Tell us a bit about how

Maverick Investor Group formed?

MB: Well, Valerie and I met in graduate

school in 1999. We both got masters de-

grees in International Peace and Conict

Resolution and then worked in human

rights advocacy in Washington, D.C., for

several years. We started investing in realestate on the side, reading books about it

and learning by experience. Soon we had

millions of dollars in real estate holdings in

states all over the country.

I met Mark in 2005 when he sold me over

$2 million worth of investment properties

in Las Vegas. I was blown away by his

customer service; it was the best I had ever

seen in any industry. These were two of the

most talented, ambitious, honest and trust-

worthy people I had ever met, all essential

qualities for business partners. The three of

us began pooling our skills, resources and

creative energies to develop a cutting edge

business model that could provide unparal-

leled advantages to real estate investors and

real estate agents. In 2007, it was ready to

be launched so we all quit our jobs, ew to

Las Vegas and, while overlooking the Stripfrom a rooftop lounge, raised our glasses

and announced to the world that Maverick

Investor Group was born!

Q: The Maverick partners live in differ-

ent states Matt is in Los Angeles, Valer-

ie is in Washington D.C., and Mark lives

between Chicago and Las Vegas. That is

pretty incredible! How did you decide to

structure your company like that and howdoes it affect your business?

VS: We were intentional about structuring

the company that way from day one, and

the primary reason is freedom of mobili-

ty for the Maverick partners. Its all about

lifestyle. We can live wherever we want

and travel whenever we want for as long

as we want, and no business falls through

the cracks because of the systems and pro-

cesses we have set up and the technology

we use. It was crucial for everyone to start

with the vision of their own ideal lifestyle.

Matt likes to work from his rooftop pool

deck in LA, Mark likes to spend extended

time in Europe each year, and I like to go

skiing in Canada and spend part of the year

in Phoenix with my parents. So we struc-

tured our real estate business to facilitate

our dream lifestyles. But, more than that,Maverick has built an entire community

of real estate investors and agents who are

focused on using real estate as a vehicle

for designing their dream lifestyles. We

show our clients how to do what we do.

You will notice that we have a section on

our website that discusses real estate life-

style design in great detail, down to the

specic technology products we use. Real

estate investing is only a means to an endits always important to keep your eyes on

the larger prize. Money isnt very useful

if you have lost touch with your dreams.

How can real estate enable you to recapture

your time, design your dream lifestyle and

make enough money to nance it? Thats

the big picture.

Q: Maverick has always encouraged

out-of-state investing, why are you now

Seaside Mariana Spa & Golf Resort features the rst Jack Nicklaus Signature Golf Course in Nicaragua.



21/31

up the coast is Nicaragua. It borders Costa

Rica and has the same weather, the same

beaches, the same sunsets, but a much

lower cost of living and, at the moment,

much lower property prices. Seaside Mari-

ana will be Nicaraguas rst luxury resort

with a ve-star international brand hotel

and a Jack Nicklaus signature golf course.

We are talking about a 923-acre resort on

2 kilometers of pristine beach front. Noth-ing like it currently exists in Nicaragua.

This project will single-handedly take the

country to the next level as a tourist desti-

nation. When the number one golf course

designer in the world chooses to go into a

market for the rst time, real estate inves-

tors should perk up their ears. It is exactly

these types of seismic events that I look for

when I choose where and when to invest

my own money.

Q: What is the political

and economic climate inNicaragua right now?

MS: Nicaragua has had

a democratic government

for the past 20 years and

has had ve transfers of

power during that time.

Recently, the government

has been passing laws to

encourage foreign invest-

moving to international real

estate?

MS: For the same reasons,

were just expanding the play-

ground. The reason why I

would never limit myself to

buying in my own city or state

is because there might be a bet-

ter market than the one I livein. The failure to consider in-

ternational real estate markets

produces the same restriction.

I want my money in the best

market in the world no matter

where I live, period. Maverick

is opening up a private chan-

nel for real estate investors to

access unlisted properties in

premium global markets, with

property management options

in place and a variety of exit

strategies. Buying through

Maverick has always meant

getting exclusive prices and

terms that are not available to

the public. That has simply expanded to

the international arena.

Q: Why did Maverick choose Nicaragua?

And why the Seaside Mariana Spa & Golf

Resort project in particular?

MB: Over the last two years, the Maverick

partners have traveled throughout Europe,

the Middle East, the Caribbean and Central

America to review real estate projects. In

our opinion, Nicaragua is one of the pre-

miere emerging markets on the world stage

today. When you look at a map of Central

America starting from the south, you be-

gin with Panama, then Costa Rica both

of which have already exploded as tour-

ist destinations over the last 15 years and

have seen corresponding appreciation in

property values and the next country

ment in Nicaragua, making

it particularly friendly to for-

eign real estate investors.

For example, as an inter-

national investor who lives

in the US, I can own freehold

property in Nicaragua with

title insurance from a North-

American-based title company, and when I sell it fo

a prot I will owe no capital

gains tax in Nicaragua. Pres-

ident Ortega has personally

endorsed the Seaside Mari-

ana resort because it is an-

ticipated that it will result in

an explosion of tourism and

be a huge economic boon for

the country. So the govern-

ment is very supportive of

foreign investors coming in

to buy real estate.

Q: What kind of deal terms

was Maverick able to nego-

tiate at Seaside Mariana and how can our

readers get in on the action?

VS: As you know, our prices and terms

are not available to the public, so I cannot

unveil any details here. I will tell you that

this is one of the most extraordinary deals

I have ever seen and that we have a global

exclusive on the entire resortthe only

way to buy a property at Seaside Mariana

is through Maverick.

For detailed information and private ac-

cess to our special prices and terms, your

readers will need to become part of the

Maverick community. Real Estate Inves-

tors can apply to join our community of

VIP Buyers and get access to unlisted deals

like Seaside Mariana. Real Estate Agents

can apply to join the Maverick Referral

Network and make 3% every time their cli-

ents close on a Maverick Deal.

We invite smart real estate investors and

savvy real estate agents to contact us todayWe dont care if someone has a lot of ex-

perience, we care if they are serious about

using real estate to build their wealth and

design their lifestyle.

For information, contact Maverick Investor

Group: www.maverickinvestorgroup.com or

email: [email protected].

Seaside Mariana Spa & Golf Resort sits on 2 kilometers of pristine beach front.



22/31

a lot of investors get

in trouble. The lower

priced homes usually

have households with

limited to no savings

or emergency fund. So

when a tenant loses a

job, the property owner

feels that impact pretty

quickly. Also lower-

priced homes tend to

be in older areas giv-ing the owner a much

higher rate of maintenance.

The Numbers

This is where investors usually make mis-

takes. The surface numbers can be very

deceiving in real estate. When analyzing

a real estate transaction

many investors arent

using vacancy and main-

tenance, or applying the

same vacancy and mainte-

nance numbers to homesthat vary widely in price,

age, neighborhood, size

and city. This can cause a

pretty big disappointment

when the cheap property you purchase is

affected by socio-economic issues leading

to high tenant turnover, criminal element,

slow-paying tenants and maintenance is-

sues.

Ive seen many people advertise profor-

mas with high cash ow on smaller, older

homes in areas with high crime, poverty,

poor schools, and with low rates of homeownership. One can argue that these can be

good investments structured correctly and

by applying the right metrics to ensure a

more accurate projection of cash ows is

achieved. These lower-end properties have

become the penny stocks of the real estate

investment business. If you get the perfect

tenant who doesnt feel the pains of the

recession, maintains the home themselves

and stays in the property for a long time,

you could hit pay dirt. Similarly if youre

well-versed in Section 8 you can prot

greatly in the lower-end homes.

The median-priced home becomes the

blue-chip property. The blue-chip hom

has lower levels of vacancy and rents that

have been buoyed by average people be-

ing displaced from their primary residence

via foreclosure. In the market where my

company is located, average-priced homes

are selling for around $115,000. Obviously

with distressed inventory out there, one can

purchase properties at lower prices thanthis, improve them and probably have eq-

uity that is more tangible than lower-priced

homes. How can one possibly model a

$115,000 home the same way as a $30,000

home? The $30,000 home (in most cases)

will have signicantly higher rates of va-

cancy and maintenance.

If you go up a step to

the higher-than-average

priced homes, youll no-

tice those homes might

offer stable tenants, usu-

ally high-end profession-als who will reliably pay

the rents. The cash ows

may look lower on the

surface than other types of

homes but these blue-chip homes perform

more reliably on maintenance, vacancy

and valuations.

Financing

Financing on blue-chip homes tends to be

much easier than most any other price point

for a number of reasons. First because the

prices are low enough you dont worryabout jumbo loan pricing, rates, and re-

strictions. On the lower end not all lenders

are lending on homes priced under $50,000

and at times have a different rate table. In

and around the median price nearly every

lender offers investor loan products. Ive

also found the appraisal issues are fewer

because normal sales activity exists at this

Blue-Chip Real Estate Strategy

Fits Economic Climate

The housing recovery is

limping along slowly

leaving many real es-

tate investors wonder-

ing where to invest their dollars.

Some speculation is even re-

turning to the market with new

investors looking to purchase,

renovate, and resale distressed

properties for short term prots.

Owning a real estate investmentbrokerage allows me to see a va-

riety of transactions, including retail ips

from speculators, investors buying $8,000

homes, renovating and placing tenants in

them, and a higher quality purchase and

hold homes closer to median home prices.

The latter is a strategy that I believe right

now is being overlooked by many inves-

tors.

The Product

There are many markets where you can

purchase and hold homes at the medianor even average home price and receive a

positive cash ow with a traditional 20%

down strategy. These homes, are out-per-

forming many lower-priced homes from

rental prices and home values perspective.

Median-priced homes in most markets are

three bedrooms, two bathroom homes,

which offer good car storage. Usually this

is the type of home most Americans desire

to live in ensuring you always have both an

available rental pool and an available buyer

pool. This product offers real estate inves-

tors multiple exit strategies with the abilityto sell it retail versus lower-end properties,

which usually need to be sold to other in-

vestors.

In addition, median-priced homes are

usually in areas low in crime, close to

schools, shopping, houses of worship, and

with easy access to employment. The in-

verse of this is, of course, also true. I per-

sonally own properties at much lower price

points as well. They took the hardest hit

on rents and value. This is where Ive seen

by Ryan Hinricher, co-founder of InvestorNation.com

This article originally appeared on BiggerPockets.com

Ryan Hinricher


Continued on page 24


23/31


24/31

price point. When you have a

lot of normal sales, valuation

tends to be (somewhat) stabi-

lized.

Exit Strategy

Having an exit strategy is an es-

sential part of your real estate plan. Some investors plan on

never selling and while that

can make sense to receive all

the benets of real estate, lives

change. If you think back ve

years ago and how different

things in your life were at the

time, you might agree that hav-

ing an exit strategy is impor-

tant.

With these blue-chip invest-

ment homes, youll nd mul-

tiple exit strategies. Median-

priced homes have the widest

available buyer pool. Think

about that for a minute: Lower-

end homes typically are resold

to investors. So imagine buying

a home on the lower-end at 60cents on the dollar and thinking

you have a lot of equity. In fact

if your future end buyer is an

investor, do you think theyll

pay 100 cents on the dollar?

Time on the market is also

another factor. At the median-

home price, time on the market

is usually shorter than any other

price point. So in planning your

long-term strategy it seems to

make sense to invest in homes

that could be sold quickly, -nanced easily, and sold at or

near market value?

Where to Find

There are many markets you

can nd these types of proper-

ties in today. Without going

into much detail in this article,

there are plenty of cities which

lie in states outside of Califor-

nia, Nevada, Arizona and Flor-

ida, which were impacted very

little by the housing boom and

bust. Many of these cities have

a good economic future, afford-

able tax rates, net population

growth, and high enough rents

to achieve positive cash ow at

the median home price.

In Summary

With distressed properties mak-

ing up a large percentage of

total sales, then it only makes

sense to focus on buying blue-

chip homes at a discount today

In doing so, one can realize

equity through quality reno-

vation, placing a tenant and

holding. These homes should

provide you relative peace o

mind when compared to lower

price points due to the lowe

socio-economic risk discussed

earlier.

These types of rentals are a

good t for people looking to

diversify out of equities andaccumulate a few properties

While they may offer stronger

fundamentals than most prop-

erties they obviously arent

bullet-proof. These are compa-

rable to owning GE stock (GE

registered no U.S. prot last

year). While you can depend

upon these homes most of the

time, the downside risk is usu-

ally minor price depression

during an economic recession.

Lastly, in many markets thistype of product and strategy

simply wasnt an option when

prices were higher. I doubt that

very far into the future this

opportunity will be as widely

available again in as many mar-

kets as it is today.

-

Ryan Hinricher is co-founde

of Investor Nation, visit online:

www.InvestorNation.com

Having an exit strategyis an essential part ofyour real estate plan.


Blue Chip Real Estate Strategy, pg. 22


25/31

I just had a great call with one

of my coaching students onhow to get a deal signed up by

the end of today. Times are tough,

and although sending direct mail

pieces is a great way to get leads,

sometimes its just not possible

to send them out especially if

youre just starting out. So over the years,

Ive learned some cheapskate ways of

nding leads.

1. Online RSS: If youve been in real es-

tate any amount of time, you probably al-

ready know that online sites such as Craig-

slist, Redn, Backpage, Oodle, etc., can

have some pretty amazing leads on For

Sale By Owner (FSBO) properties. The

only problem is that it takes tons of time to

sort through all those sites to nd a decent

deal.

Rhett Halsey, one of my good friends and

an internet marketing guru for real estate

investors, told me of a free feature offered

by most websites: RSS or Real Simple

Syndication. Instead of multiple searches

for leads, the leads come to you in onespot. You can set up a Google Reader ac-

count and have all these leads sent directly

to you, the minute they are posted on one of

these sites. Its simply amazing how much

time this saves.

We have just implemented this in my of-

ce and within a few days got three proper-

ties under contract and sold them within a

few hours. My new assistant was oored

at how quickly an investor can get a deal

under contract and sold!

To set up your own RSS feed, go to your

favorite FSBO site, Craigslist (www.Craig-slist.com) for example. Do a search using

motivated seller keywords like xer,

investor, etc., one word at a time. Once

the search is complete, you can scroll to the

bottom of the page and click on RSS or the

little orange RSS icon. Set it up to point to

your Google Reader, and youre done!

2. Multiple Listing Service: Your local

MLS (Multiple Listing Service) offers a

great way to nd leads for free. You can

narrow down your search

to REOs, probates, xersor other criteria. You dont

even need access to the

MLS, just nd an investor-

friendly agent and let them

know your criteria. They

will set you up to receive

free emails.

Its important to work with an agent who

knows you want a smokin deal, and who

will make lots of lowball offers on your be-

half without inching.

For most listings, other than REOs, you

can also try and make seller-nancing

deals. The point is to get your foot in the

door and start negotiating with the seller.

Another lead system you can set up on

the MLS is expired listings. These list-

ings have expired without anyone buying

the property. This can mean youd be deal-

ing with very motivated people!

Set up a win-win situation with your

agent where they can present your offer,

and if the sellers dont like it, the agent may

be able to pick up a new listing.

3. Other Wholesalers: One of my absolute

favorite ways to nd deals is to ask other

wholesalers what they currently have un-

der contract and to market that property

to my buyers list. Or, if youre a rehab-

ber or landlord, you can pick up amazing

deals without having to do all the leg work.

Where do you nd these wholesalers? If

you see a We Buy Houses sign, call them.

Youll likely be dealing with a wholesaler.

Also visit your local REI meetings, Google

wholesalers in your area, ask rehabbers

who they recommend, and ... dont forget,

ME! Im an active wholesaler in Southern

California who loves working with other

investors. (Shameless plug? Of course.) If

you get a deal done and need to sell your

property really quickly, let me know.

Well, now there is no excuse for you not

to nd a deal today! Good luck and send

me a brief email letting me know if you

found this helpful.

To contact Ginger Macias or learn about

her speaking engagements and wholesaledeals, visit: www.OCWholesalers.com

3 FREE Ways to Find aGreat Wholesale Deal Today!


by Ginger Macias


26/31


27/31

Lets face it

the country,

t h e e c o n -

omy and the real

estate market is

just terrible. There

are no more good

deals. Lets all getout of the business.

People are not building, buying or selling

homes any more. There are so many over-

encumbered and foreclosed-upon cheap

properties available for pennies on the

dollar that nobody wants them anymore.

After all, who can make a living in this ri-

diculous business these days?

Oh yeah?

And Michael Jackson faked his death,

Elvis eats at Burger King, and the world

ends in three years!

Not that theyre needed anymore, buthere are a couple solutions to these hor-

rible problems facing real estate investors

in this disastrous economy:

1. Stay in bed with a tinfoil hat on your

head.

2. Go live with your parents and let them

feed you until you win the lottery.

3. Go back to school on the government,

and get a law degree so you can force peo-

ple to pay you to stop suing them.

OR...

4. You can capitalize on singularly the

greatest money-making opportunity ever!And you dont even need a dollar or a dime

to do it.

SHORT SALES

The short sale industry is burgeoning

now and will probably continue to do so

for three more years. New short sale mil-

lionaires are being made every day. There

are billions upon billions of dollars (Re-

member when a billion dollars was a lot

of money?) to be made in the transac-

tional funding of compromised mortgage

defaults loans that would otherwise be

forced into expensive and time-consuming

foreclosures, and sold by lenders at public

auction.

Def: Short Sale: The acquisition of real

estate at a compromised (wholesale) pay-

off amount that is less than the balance of

the mortgage obligation.

Def: Transactional Funding: The two-

stage practice of using another persons

money for a day

or two at a high

interest rate (but at

a reasonable cost),

with which to pur-

chase a foreclosed-

upon property by

means of an all-cash offer prior to

its scheduled pub-

lic sale date. And then selling it on the day

of closing, or soon thereafter, in a separate

escrow settlement to an end-buyer who ob-

tains his own loan and lives in and loves

the property forever.

This process is known as the A to B/B

to C transaction. In other words, you, the

investor are the B component; the cur-

rent owner is A, and the end-buyer is

C. In other words, B buys from A

in one escrow closing process (taking full

ownership of the property), and then sells

the property to C at a reasonable prot in

a wholly separate escrow process.

It all sounds simple and it is! However,

a thorough knowledge of all the rules and

regulations concerning short sales, equity- purchasing, equity-stripping, foreclosure

consulting, credit repair and mortgage

lending is absolutely mandatory before

becoming too far vested in the business

of short sales. To date, hundreds of other-

wise nice-guy and gal would-be investors

have been severally sanctioned, shut down,

heavily ned and/or sent to prison for vio-

lating the very stringent laws regulating

short sales and foreclosure consulting in

various states.

In my own case, Ive spent my busi-

ness as a fearless bull rider: but in this last

Rodeo, Im sticking to riding milk cows.

I wont set any records or win any prizes;

but Im a lot less likely to get thrown of and

have a horn poked up my rear end ( this,

is, by the way, an analogy not a good one,

I agree, but an analogy none-the-less).

One of the most often violated of the

many regulations being put on the books

as of late has been that of taking money

for, or in advance of, services to be ren-

dered, whether such services are actually

performed or not. Another common viola-

tion has to do with sand bagging by attor-

neys, and many non-attorneys, who bill on

a monthly basis for services (mostly loan

modication schemes) while a short sale

or loan modication process is presumably

taking place. Instead, either there never was

any such attempt or the attempt failed, and

the client wasnt informed and was told,

Were working on itbe patient, while

the monthly payments continue.

Another big one, and one that is proba-

bly most tempting but also most deadly for

REALTORS, is the situation wherein the

investor/REALTOR has already lined-up a retail buyer who is ready to take the

property at its true market value following

the short sale acquisition by the investor

When the scheme comes to light, the con-

tention by the lender in these cases is that

if the property were worth more than they

were told in the transaction, there would

have been no need for a short sale and their

resultant loss. They see such schemes as

blatant bank fraud and have no sense o

humor in such cases. As a matter of fact

two REALTORS in Massachusetts were

recently sentenced to ve years in prison

each for having used this scheme several

times.

So the long and short of it iskinda

like Henny Youngman was one to say: If

its gonna hurt when you go like that for

cryin out loud, dont go like that!

Todays short sale market is burgeoning

...two REALTORSin Massachusetts were recently

sentenced to ve years in prison each for

having used this scheme several times.

by Bill Gatten

Continued on pg. 29


28/31

Todays real estate environ-

ment can seem a little

tricky to navigate. So many

possible ways to make

money exist in this indus-

try, it can be overwhelm-

ing, especially for those who are just get-

ting started in real estate investing. There

are many late-night television shows that

claim to teach you how to be a multi-gazil-

lionaire by next week, but is there any truthto what theyre saying?

Take a look around. Youll notice that

there are a lot of successful real estate en-

trepreneurs, people who are making a kill-

ing today, in this down market. The ques-

tion is did they just start making lots of

money by pure luck, or did they have men-

tors, courses and systems to help them

achieve their success? Those of you who

are living the real estate dream, you know

that luck had little to do with where you are

today. It takes concrete actions, goals and

guidance to get to your dreams.

Well, for those of you starting out in real

estate who are anxious to get going, there

are wonderful ways to get into all this ac-

tion.

Recently, I spoke with Matt Malouf

about his new program, which helps inves-tors bridge the gap from real estate dream

to reality. And by reality, Im talking about

actually owning your very own investment

property at the end of the course! (More on

that later.)

Malouf is an investor-friendly real estate

agent in California and has been investing

since 2001. Over the years, he has special-

ized in wholesaling, owner nancing and

foreclosures. Malouf has developed a busi-

ness model that he describes as T.E.R.M.

It is a model designed to efciently

minimize the investors time, energy, re-

sources and money in that order, he ex-

plains.

To that end, his program is a 10-week

course that walks investors through the ex-

act steps needed to nd, analyze and buy an

investment property that cash ows from

day one. Some topics include learning how

to set up your property management team,

screen tenants, how to hold title and nanc-

ing options.

The motivation to create this course

came from Maloufs desire to meet the

needs of investors who want to get educat-

by Ginger Macias

Weeks to

with Matt Malouf


29/31

ed and match them with the

best available product in the

real estate marketplace.

This hybridization will en-

able beginning investors to buy

a property that meets their cri-

teria, after learning all the basic

steps needed to acquire and

manage that property.This is not just a course,

Malouf explains. At the end of

10 weeks, theyre going to have

a cash-owing house, an asset

to put in their portfolio. It is

all- inclusive in the program.

Maloufs T.E.R.M model is

ideal for someone who has a

full-time job and wants to start

building a real estate portfolio

as part of their retirement plan.

Over the course of 10 weeks,

students receive the entire

course through the internet,

which includes 30 to 60 minute

lessons by audio, video and text

articles. Each student also re-

ceives the Million Dollar

Rolodex, which gives the con-

tact information of all the key

It takes concrete actions, goals andguidance to get to your dreams.

There really is no limit to the

number of homes in foreclo-

sure that lenders would like to

get off their books in order to

reduce their matching fund re-

quirements and free up more

cash to lend out.

Millions of dollars are ready

to be made by integrally in-

volved entrepreneurs over the

next few years.

To miss out on any of it

would be an out-and-out shame

if not a crime.

There are two sets of adages

to live by that one must ponder

and decide upon before jump-

ing into the business:

Set A - Strike while the iron

is hot; He who hesitates is

lost; The early bird gets the

people on the team. Malouf and

his team then go out and nd a

property that meets the stu-

dents needs. They send per-

sonalized updates, letting them

know whats being done to nd

them a property.

This program lays the foun-

dation to successful real estateinvesting. Malouf gives this

analogy: Its like building a

skyscraper. You have to spend

the time to set up a foundation

and set it nice and deep, nice

and strong. That way, it will

stand through the good and the

bad.

Maloufs T.E.R.M program

launched this summer and is

available year-round to a limit-

ed number of people. Be sure to

reserve your place today.

Readers can contact Matt

Malouf directly at (562) 443-

7042; mention the out-of-

state magazine special. Or

visit: www.buysellwithmatt.com

Enter the promo code Real-

ty411 in the note section.

worm, and If everybody is

doing it, its time to do some-

thing else.

Or

Set B - Haste makes waste;

Look before you leap; and

Wait until all the bugs are

worked out before you jump

in, or Wait until you see ev-

eryone else doing it, then jump

in why take chances?

My own: Successful people

make quick decisions and are

slow to change their minds, the

unsuccessful are slow to com-

mit and quick to change their

minds.

So, whats my advice regard-

ing the current short sale mar-

ket? OK, guess!

A Brave New World, pg. 27



30/31

Continued on pg. 59

by Linda Pliagas

Cant seem to locate

a distressed home-

owner or unwanted

property? Believe it

or not, many people

have real estate th

Real Estate WEALTH Magazine - PART ONE

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